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May forecast: Lorain City Schools projects deficits in five-year outlook; state budget scenarios vary widely
Summary
The district treasurer presented a May forecast showing deficit spending in the general fund this year and multiple scenarios that project negative cash balances by fiscal year 2028–29 depending on state funding and levy outcomes.
The Lorain City Schools treasurer presented an updated May five-year forecast showing the district is deficit spending in the general fund this fiscal year and that its ending cash position will decline under several possible state-budget scenarios.
The treasurer said the district’s beginning cash balance for fiscal year 2025 is about $22 million and that the May forecast projects deficits under all modeled scenarios. Using the house budget with guarantee reductions, the forecast projects a cash balance of about negative $13 million by fiscal year 2029. A fair-school-funding plan with continued phase-in resulted in a smaller projected deficit (about negative $3 million), while the governor’s proposed budget produced a larger deficit (about negative $14 million). The treasurer said the district would face a negative cash balance in fiscal year 2029 if expiring levies are renewed, or in fiscal year 2028 if levies are not renewed.
The presentation said fiscal-year-25 revenue is trending slightly higher than the November forecast, driven by increases in unrestricted state aid and other revenues. Expenditure reductions since the November forecast — driven by nearly 30 position reductions through attrition, about 50 certified staff retirements, lower health-insurance costs after hiring a new consultant and suspensions of some purchased services — improved near-term projections and removed the district from fiscal-precautions status with the Ohio Department of Education at the time of the presentation.
The treasurer said the forecast is sensitive to the final state biennial budget expected by July 1, and the district will prepare an updated forecast once the state budget is finalized. The presentation recommended continuing to evaluate programs, review levies and plan for potential requests to taxpayers if state funding and other revenues do not meet needs.
Board members accepted the May forecast presentation; later in the meeting the board approved routine financial items listed as agenda items 8.01 through 8.06 by roll call.
